CFPB issues warning to mortgage servicers

On April 1, 2021, acting Director of the Consumer Financial Protection Bureau (CFPB), David Uejio, fired a shot across the bow of mortgage servicers in the form of a Compliance Bulletin and Policy Guidance (Bulletin). A copy of the Bulletin can be found here

As the mortgage industry is well aware, there are millions of borrowers currently in default of their mortgage obligations. This could lead to a flood of foreclosures when forbearance periods end later this year. 

In no uncertain terms, the Bulletin warns that the CFPB will be keeping an eye on how mortgage servicers respond to borrower requests for loss mitigation assistance and process loss mitigation applications. Among other things, the CFPB will consider a servicer’s overall effectiveness at reducing avoidable foreclosures (along with other relevant factors) in using its discretion to address violations of federal consumer financial law in supervisory and enforcement matters. Read more >>

Consumer Lending and Services, Legal Developments